In a strategic maneuver, Bain Capital is contemplating a potential sale or initial public offering (IPO) for Varsity Brands, a prominent player in sports uniforms and school yearbooks. Industry insiders suggest that this move could place Varsity Brands at a valuation surpassing $6 billion, encompassing debt.
To execute this financial strategy, Bain Capital is in talks with investment banks, aiming to enlist financial advisers for a well-crafted plan to divest its majority stake in Varsity Brands. The acquisition of Varsity Brands by Bain Capital took place in 2018, involving a transaction valued around $2.5 billion, marking a significant development in the private equity landscape.
Varsity Brands operates through two core entities:
- BSN SPORTS: Renowned for customizable team sports equipment and apparel, BSN SPORTS has strong partnerships with major brands such as Nike and Under Armour.
- Varsity Spirit: A key player in cheerleader uniforms, apparel, and educational events, Varsity Spirit retained its position in the school yearbooks sector post the sale of Herff Jones to Atlas Holdings earlier this year.
With a robust 12-month EBITDA exceeding $400 million, Varsity Brands stands as a major force in the industry.
This strategic move aligns with the broader trend of private equity firms seeking exits from apparel businesses. The potential valuation of Varsity Brands follows recent successful IPOs, like L Catterton’s Birkenstock Holding IPO at a $9.3 billion valuation and New Era Cap’s exploration of an IPO valued at $4 billion to $5 billion.
As the private equity landscape evolves, this move by Bain Capital underscores the dynamic nature of the apparel sector and the strategic considerations driving financial decisions in the industry. Stay tuned for updates on this potential high-profile exit and its impact on the market.